San Diego Gas & Electric is pushing forward with a second new gas-fired power plant in response to the retirement last year of the San Onofre Nuclear Generating Station.

The investor-owned utility has negotiated a contract to underwrite construction of the Carlsbad Energy Center, pending approval of state utility regulators. The deal, submitted Monday, would make way for the demolition of the Encina Generating Station, the adjacent seaside power plant built 60 years ago.

SDG&E maintains that the Carlsbad plant represents the only option of sufficient size that can meet construction deadlines linked to the retirement of Encina.

The plan has consumer and environmental groups in an uproar over the utility's rush to add fossil fuel burning plants without further consideration of cleaner technologies and approved transmission upgrades designed to offset power needs.

"It’s a 20-year contract, so we’re locking in a long-term fossil fuel commitment when we should be rapidly decarbonizing our energy supply," said Matt Vespa, an attorney for the Sierra Club. "It's directly contrary to where this state should be going.”

The California Public Utilities Commission will decide whether it is reasonable for customers to pay for the Carlsbad power plant contract negotiated directly between SDG&E and NRG Energy, also the owner of Encina. The City of Carlsbad has signed off on the new plant's construction.

SDG&E said the new plant would cost consumers about $2.6 billion over the course of 20 years. It considers that price comparable with the Pio Pico Energy Center, which was originally contracted through a competitive bidding process and approved by regulators in February as a replacement to nuclear power.

Pio Pico, a 300 megawatt facility, is expected to cost $1.6 billion over 25 years. The Carlsbad facility is twice that size.

The existing Encina plant relies on an antiquated ocean water cooling system that has proven to be harmful to marine life. Retrofitting plants to replace those cooling systems can be prohibitively expensive, and regulators have targeted Encina for retirement by the start of 2018.

SDG&E also intends to open a bidding process to meet 200 megawatts of power demands from sources including wind and solar, improved energy efficiency, timely conservation measures, hyper-efficient fossil fuel plants and energy storage devices.

That meets a minimum commitment set by the California Public Utilities Commission in May, in response to the nuclear plant shutdown. San Onofre provided for 20 percent of power demands in the San Diego area before its shutdown in January 2012 after new steam generators sprang a leak.

Groups including the Sierra Club, the Natural Resources Defense Council and The Utility Reform Network have filed appeals arguing that SDG&E flouted state utility commission directions by contracting the maximum allowable amount of electricity for fossil fuels from one source.

A judge at the utilities commission rebuffed the arguments, but the five-member commission will have final say during an upcoming meeting.

The Office of Ratepayer Advocates contends that SDG&E's plans ignore expensive upgrades to the transmission grid in response to the San Onofre shutdown that reduce local power needs. It cited three Southern California transmission infrastructure projects, costing utility customers roughly $600 million and $1 billion.